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EXHIBIT 10.12(a)
CHANGE-IN-CONTROL AGREEMENT
CHANGE-IN-CONTROL AGREEMENT (the "Agreement"), dated as of December 31,
1996, between North Fork Bancorporation, Inc., a Delaware corporation with its
principal place of business at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000
("Parent"), and Xxxxxx X. X'Xxxxx (the "Executive").
WHEREAS, Parent, North Fork Bank, a New York-chartered commercial bank
("NFB"), and North Side Savings Bank, a New York-chartered stock form savings
bank (the "Bank"), have entered into an Agreement and Plan of Merger, as
amended, dated July 15, 1996 (the "Merger Agreement"); and
WHEREAS, the Executive is presently Chairman, President and Chief
Executive Officer of the Bank; and
WHEREAS, after the consummation of the transactions contemplated by the
Merger Agreement, the Executive will serve as Vice Chairman of each of Parent
and NFB, and will provide valuable services to Parent and its subsidiaries; and
WHEREAS, the Executive has requested certain assurances in the event of
a change in control of Parent during the term of his employment by Parent; and
WHEREAS, Parent wishes to create an environment which will encourage
the Executive to render best efforts on Parent's behalf in the event such a
change in control occurs or is proposed; and
WHEREAS, the Board of Directors of Parent (the "Board") has approved
and authorized the negotiation, delivery and execution of this Agreement on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, Parent and the Executive hereby agree
as follows:
1. Term of Agreement. This Agreement shall
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commence on the date (the "Commencement Date") of commencement Period
established under Section 2 of the Employment Agreement, dated as of December
31, 1996, between Parent and the Executive and shall continue in effect until
the earlier of:
(i) the normal expiration date, which shall be the third
anniversary of the Commencement Date; provided, however, that commencing on
the first anniversary of the Commencement Date, and annually on such month
and day in each succeeding year thereafter (the "Renewal Date"), the normal
expiration date for purposes of this subsection (i) shall automatically be
modified and extended to become the third anniversary of such Renewal Date,
unless at least sixty (60) days prior to any such Renewal Date the Board,
upon the affirmative vote of a majority of its members, shall have voted
not to renew this Agreement, in which event the normal expiration date for
purposes of this subsection (i) shall not be further extended but shall
remain the normal expiration date in effect at the time of such
non-renewal; or
(ii) the date of discontinuation of the employment of the
Executive with Parent and its subsidiaries, including by virtue of the
death, disability, retirement at normal retirement age, voluntary
resignation, or termination for any cause or no cause of the Executive;
provided, however, that if a change in control of Parent shall occur prior to
the normal expiration date under (i) above or the date of discontinuation of
employment under (ii) above, the provisions of Section 2 shall apply and this
Agreement shall not expire until completion of the Exercise Period as defined in
Section 2 and the performance by Parent of the last obligation required to be
performed by it under Section 2.
2. Severance Compensation.
(a) If a Change in Control (as defined in subsection (c)
below) shall occur during the term of this Agreement and, at any time during the
period beginning on the date of the Change in Control and ending on the date
which is two (2) years after the date of Change in Control (the "Exercise
Period"), the employment of the Executive with Parent and its subsidiaries is
terminated, either
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because the Executive voluntarily elects to terminate such employment or because
the Executive is involuntarily terminated by Parent or its subsidiaries, then
the Executive shall be entitled to receive from Parent, and Parent shall deliver
to the Executive, within thirty (30) days after the effective date of such
voluntary or involuntary termination of employment, a lump sum cash payment (the
"Severance Payment") in an amount equal to:
(i) 299% of the "base amount" of the Executive's compensation at
the time of such Change in Control (as defined in and determined under
Section 280G of the Internal Revenue Code of 1986 (the "Code"), as the same
may be amended from time to time), minus
(ii) the present value of all other payments and benefits
received or receivable by the Executive from Parent or its subsidiaries,
under any other contract or plan, that are contingent upon such Change in
Control within the meaning of and as calculated pursuant to Section 280G of
the Code, exclusive of (y) any payments received or receivable by the
Executive under Parent's Performance Plan (or any successor thereof), and
(z) the value, determined in accordance with Section 280G, of any
acceleration, incident to or in connection with such Change in Control, of
the exercisability of any options or rights to acquire stock of Parent or
any securities related to or derivative of the stock of Parent or the
market price or other value thereof, or of the vesting of any restricted
shares of stock of Parent.
Notwithstanding the foregoing or any other provision of this
Agreement, the Executive shall not be entitled to receive any Severance Payment
or any other benefits under this Agreement following a Change in Control if
Parent shall terminate the Executive for Cause as defined in (and limited by)
Section 3 of this Agreement.
(b) For purposes of Section 2(a) above, the Executive shall be deemed
to have been involuntarily terminated by Parent or its subsidiaries other than
for Cause immediately following a Change in Control, if a Change in Control
occurs and, prior to such Change in Control, the Executive's employment with
Parent or its subsidiaries has been terminated at the direction or upon the
recommendation or urging of any entity unaffiliated
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with Parent that is a party to any transaction relating to or constituting such
Change in Control or any person, including an executive officer or director, in
a position of authority with respect to any such entity. In such event, this
Agreement shall be deemed not to have expired for purposes of Section 1 upon the
termination of the Executive's employment before the Change in Control.
(c) For purposes of this Section 2, a "Change in Control" of Parent
shall be deemed to have occurred as of the first date that any of the following
events occurs:
(i) There shall be consummated (A) a consolidation, merger or
stock-for-stock exchange involving either Parent or the securities of
Parent, in which the persons holding all voting securities of Parent
immediately prior to such consummation own, as a group, immediately after
such consummation, voting securities of Parent (or, if Parent does not
survive such transaction, voting securities of the corporation surviving
such transaction which issued securities to such group in such transaction)
having less than fifty percent (50%) of the total voting power in an
election of directors of Parent (or such other surviving corporation),
excluding securities received by any members of such group which represent
disproportionate percentage increases in their shareholdings vis-a-vis the
other members of such group, or (B) a sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of Parent and its subsidiaries, on a
consolidated basis, to a party which is not controlled by or under common
control with Parent;
(ii) Any individual, corporation (other than Parent),
partnership, trust, association, pool, syndicate or any other entity or
any group of persons acting in concert becomes the beneficial owner as
that concept is defined in Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as the
result of any one or more securities transactions (including gifts and
stock repurchases, but excluding transactions described in subsection
(i) above), of securities of Parent possessing twenty-five percent
(25%) or more of the voting power for the election of directors of
Parent; or
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(iii) "Approved Directors" shall constitute less than a
majority of the entire Board of Directors of the company, with
"Approved Directors" defined to mean the members of the Board of
Directors of Parent as of the date of this Agreement and any
subsequently elected members of such Board who shall be nominated or
approved by a majority of the Approved Directors on the Board prior to
such election.
(d) The Executive shall not be required, as a condition to receiving
the Severance Payment provided for under Section 2(a) hereof, to forfeit any
right to receive amounts or distributions under, or to forfeit any participation
in, any plan or program of Parent in effect at the time of such termination of
employment (including broad-based severance plans of Parent), or to mitigate the
amount of any such Severance Payment by seeking other employment or gainful
pursuit following the termination of his employment with Parent. Parent shall
not be permitted to offset against the amount of any such Severance Payment,
except as specifically permitted in the calculation thereof under Section 2(a)
or as further provided in Section 2(h) hereof, (w) the amount of any
compensation or income earned by the Executive as the result of his subsequent
employment by any other employer or subsequent self-employment, (x) the amount
of any retirement, insurance or similar benefits subsequently received by the
Executive, (y) the amount of any payments previously or subsequently made by
Parent or its subsidiaries to the Executive or persons or entities affiliated
with the Executive for services rendered or goods provided, or (z) any amounts
owed or payable or claimed to be owed or payable by the Executive to Parent or
any affiliate of Parent.
(e) Regardless of any Severance Payment made to the Executive under
Section 2(a) of this Agreement following the termination of the Executive's
employment, in the event Parent shall have committed any breach of any other
agreement or contract with the Executive, Parent also shall pay to the Executive
any and all damages resulting from such breach, including liquidated damages, if
so provided under the relevant agreement or contract.
(f) Regardless of any Severance Payment made to the Executive under
Section 2(a) of this Agreement following the termination of the Executive's
employment, Parent also shall pay to the Executive following such termination
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of employment any amounts or benefits then payable or distributable to the
Executive under any employee stock plan or agreement, any supplemental executive
retirement plan or agreement, and any other employee benefit plan or agreement.
(g) The status of the Executive or any individual related to the
Executive as a participant in any individual or group health or insurance plan
or program of Parent or its subsidiaries in which the Executive was
participating as of the date of termination of employment of the Executive shall
not be affected by any Severance Payment made to the Executive under Section
2(a) of this Agreement.
(h) If the Executive becomes entitled to receive payment of any amount
under Section 2(a) of this Agreement that, in and of itself or in conjunction
with any other amounts paid or payable to the Executive (whether by Parent or
otherwise) following or in connection with such Change in Control, would, if
paid, be considered an "excess parachute payment" as defined in Section 280G of
the Code, then such payment hereunder will be reduced in amount to the extent,
but only to the extent, necessary to ensure that such payment, when paid, will
no longer be considered such an "excess parachute payment, excluding, however,
for purposes of all calculations under this Section 2(h) those payments and
values excluded under Sections 2(a)(ii)(y) and (z), above.
3. Termination For Cause. Following a Change in Control, Parent may
terminate the Executive's employment under this Agreement for "Cause" upon ten
(10) days' written notice, and in such event, the Executive will not be entitled
to receipt of any Severance Payment or any other benefits specifically provided
under this Agreement. During such ten days written notice period, the Executive
may not voluntarily terminate his employment. Termination for "Cause" for
purposes of this Section 3 shall mean termination of employment of the Executive
by a two-thirds (2/3) vote of the entire Board of Directors of Parent or the
entire board of directors of the particular subsidiary of Parent employing the
Executive, expressly for one or more of the following causes, as evidenced in a
certified resolution of such Board:
(i) willful misconduct by the Executive that is materially
injurious to the financial condi-
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tion of Parent or the particular subsidiary; or
(ii) conviction of the Executive with no further possibility
of appeal of a felony under applicable state or federal banking or
financial institution laws, or the agreement of the Executive to plead
guilty to any such felony; or
(iii) failure by the Executive adequately to perform the
duties of the Executive, as communicated to the Executive with
specificity by a senior corporate authority (which, in the case of the
Chief Executive Officer, shall be the Board of Directors), after
express notice of such failure to perform and a 30-day opportunity to
cure such failure.
4. Benefits Following Change in Control. Following a Change in Control
of Parent, pending termination of the Executive's employment or expiration of
the Exercise Period:
(i) The Executive shall be entitled to receive from Parent or
its subsidiaries such personal or group health and insurance benefits
as the Executive may have been receiving as of the date of the Change
in Control;
(ii) The Executive shall be entitled to participate in and/or
receive allocations under any and all employee benefit plans or
programs or employee stock purchase plans or programs as are being
maintained by Parent or its subsidiaries as of the date of the Change
in Control and which cover or permit participation by key employees
such as the Executive; and
(iii) The Executive shall be entitled to continue to receive
such other benefits, goods or services as are being received by the
Executive as of the date of the Change in Control, including any
additional insurance coverage then being received and any access to
Parent-owned or leased vehicles and Parent-funded club memberships as
is then being provided.
5. Non-competition. If the Executive receives a Severance Payment
under Section 2(a), the Executive shall not, during the one (1) year period
following re-
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ceipt of such Severance Payment, without the express prior approval of the
Board, become an officer, employee, agent, partner or director of, or serve as a
consultant for, any other business in substantial competition with Parent or any
of its subsidiaries in any one or more geographical areas (no such individual
area being larger than a county) in which Parent or such subsidiary is then
conducting material business. It is the intention of the parties to restrict the
activities of the Executive under this Section 5 only to the extent necessary
for the protection of the legitimate business interests of Parent.
6. Indemnification. Parent shall indemnify the Executive from and
against all legal fees and expenses necessarily and reasonably incurred by the
Executive in connection with any action, suit or proceeding brought by the
Executive or Parent for the enforcement, performance or construction of this
Agreement, unless the Executive shall have been wholly unsuccessful, on the
merits or otherwise, in such action, suit or proceeding. Upon obtaining
appropriate assurances of repayment, where appropriate, Parent may advance such
fees and expenses to the Executive to the extent permitted by applicable law.
7. Withholding. Any amount to be distributed to or on behalf of the
Executive as a Severance Payment under this Agreement will be reduced by the
amount, if any, required to be withheld by Parent or its subsidiaries pursuant
to any governmental law or regulation with respect to taxes or similar
provisions.
8. Amendment; Waiver; Termination. No amendment, modification or
waiver of any provision of this Agreement shall be effective unless in a writing
signed by the party against whom such provision as amended or modified or such
waiver is sought to be enforced. Failure to insist upon strict compliance with
any of the terms or conditions of the Agreement shall not be deemed a waiver of
such term or condition. This Agreement shall terminate as provided in Section 1
hereof or upon earlier agreement of the parties; provided, however, that
Sections 5 and 6 of this Agreement shall survive such termination for one (1)
and five (5) years, respectively.
9. Successors; Binding Agreement. This Agreement shall be binding upon
and inure to the benefit of Parent and its successors and assigns. Parent will
require any successor (whether direct or indirect, by acqui-
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sition, merger, consolidation, corporate reorganization or otherwise) to all or
substantially all the assets or the business of Parent to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
Parent would be required to perform it if no such succession had taken place. In
the event the Executive shall die after becoming entitled to receive, but prior
to receiving, any Severance Payment or any other amounts or benefits receivable
hereunder, payment thereof shall be made by Parent to the beneficiary designated
by the Executive to receive such amounts hereunder or, if none such, to the
beneficiary designated by the Executive for purposes of the group life insurance
plan of Parent in which the Executive shall have participated at the time of
termination of employment or, if none such, to the estate of the Executive.
10. State Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.
11. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect to the
maximum extent permitted by law.
12. Counterparts. This Agreement may be executed in one or more
counterparts.
13. Notices. Any communication to a party required or permitted under
this Agreement, including any notice, direction, designation, consent,
instruction, objection or waiver, shall be in writing and deemed to have been
given at such time as it is delivered personally, or five (5) days after mailing
if mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:
If to Parent:
North Fork Bancorporation, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Corporate Secretary
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If to the Executive:
Xxxxxx X. X'Xxxxx
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date and year first above written.
NORTH FORK BANCORPORATION, INC.
By: /s/ Xxxx Xxxx Xxxxx
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Name: Xxxx Xxxx Xxxxx
Title: Chairman,President &
Chief Executive Officer
Xxxxxx X. X'Xxxxx
/s/ Xxxxxx X. X'Xxxxx
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